>> yeah, because we've been losing more. >> only lost 20,000. >> got you. greece isn't ruling out going to the imf to seek help with its debt crisis the company announcing more tax hikes and spending cuts today. unions vowing to fight it all the way. >> we're also watching shares of the pharma company medivation falling sharply. the ceo is coming on this show in the next hour. >> president richard fisher saying banks seen as too big to fail should be broken up and also talking about job creation. >> the thing that they're really waiting for is a better sense of direction before they have the confidence to invest, hire people, and get back to work. >> we're looking at a moderately higher open today despite the jobs data. had a good day in asia again today, mark. >> and you can see at the bottom of the screen representative

charles rangel stepping down temporarily as house ways and means committee chairman. he's been under a lot of pressure to do so. let's hit the markets. we start with, hey, look who's back. bob! >> good to see you, mark. greece has a somewhat clear plan to reduce the deficit. that's supporting europe a bit here. we have mixed results from retailers. bjs wholesale missed earnings and guidance was on the disappointing side though february comp store sales appear to be pretty good. that's generally the story so far. big lots saying something similar. their earnings a little bit better and their guidance also a little better than expected. they're also increasing their buy back program. finally a nice surprise from ethan allen up 9% preorder, showing improved trafficking over all. trader talk.cnbc.com. here's the new trading floor for the nyse and we'll talk more about that a bit later. >> reporter: you look handsome. the floor looks great. one stock booking beautiful this morning is novell. the company is considering an offer to be taken private by a

hedge fund it already accumulated a sizable stake in the company. values of the shares at 5.75 trading above that. also southwest water, very small company also looking to be taken private there as well for $11 a share to a partnership they'll be selling 2.7 million shares for them this afternoon. here is medivation the company working with pfizer on an alzheimer drug. it failed. mike will have more later. let's head down to the nymex. >> thank you very much. we're on the rise with the oil crude back above $80 a barrel, 80.23. right at the moment. of course it seems to be the dollar is the driving force at the moment. we did have the api numbers out at 4:30 p.m. eastern time yesterday. a quick peek at them. bigger bills including gas but a big drawdown in distallates where the eia numbers are coming out at 10:30 eastern. six-week highs in gold. it pulled back but we're high across the board. rick in chicago? >> thank you very much, jack. of course we all saw adp and the revision and we all know snow is going to be put forth as a

reason for potentially more job destruction friday but we did see a slight rise in rates, slight drop in equities on that data and maybe even more important data relative to the service sector will be coming out in 57 minutes in the nonmanufacturing ism. dollar under a little pressure and back to mark haines. >> thank you, rick santelli. let's check out asia overnight. and they were up except for a little problem with the hang seng. up very nicely across the board. european markets also up very nicely averaging probably about 0.3 gain as greece lays out new austerity measures. guy johnson live in athens. steve sedgwick in madrid covering what's happening in europe. we start with guy. >> reporter: hey, mark. yes, pretty much as expected in terms of the latest austerity

package coming out of athens today. we've seen around 5 billion in terms of cuts and tax increases being announced. we have seen greek debt spread over germany tightening up a little bit. that's pretty much to be expected. the war of words that really is becoming really quite heated now between athens and berlin is quite extraordinary. we had a series of comments coming from the government last night. he said if greece couldn't borrow in the bond market at similar rates to its euro zone peers that would be an absolute catastrophe. in cabinet this morning he said maybe greece should go to the imf. that will be a huge blow to the credibility of the euro zone and today he came out and indicated that he feels that europe really should stand behind it. merkel is saying friday's meeting will produce no aid for greece. it's a really interesting war of words because this sets the precedent for the rest of europe. talking of the rest of europe we're watching spain very

carefully. my colleague and friend, steve sedgwick, is standing by there. >> reporter: thank you very much indeed. as we all know this government is a socialist government as well as the government over in greece and whatever problems increase, it is magnified when it comes to spain. 5 billion euro us an tert package in greece. they're talking about a a 50 billion euro situation here. 11.4% budget deficit, 19% unemployed. it's a country which is still in recession down 3.6% last year. and as you know, simon, this is an economy which has a whole host of structural issues and the question is if the government has got the guts and the stomach for the fight with the unions. back to you guys. >> steve, thank you very much. steve sedgwick live in madrid. back in the united states, the adp jobs report showing the private sector lost 20,000 jobs last month. steve liesman joins us with more

on that. still losing jobs, though, steve. >> yeah, simon. it was decidedly mixed adp report. it's a marked improvement from the worst days of the recession but as simon says, they are still job declines in the month of february. total private sector employment down 20,000 right in line with estimates. while january was revised down from minus 22 to minus 60,000. underneath that you see the economists' consensus expectation for government and private sector hiring down 75,000 but it could be a lot worse. we'll talk about that in a second. let's do the details of the adp report. it's mixed when it comes to the size of the business. small business still shedding workers, down 18,000, while medium-sized businesses of 50 to 500 workers were increasing, and large scale businesses down as well. notice by sector what you see is that the goods producing sectors are also losing workers with manufacturing up 3,000. inside of that, by the way, construction workers were losing jobs again, not thought to be weather related.

service sector though adding jobs. unfortunately, even the people that put together the adp report say the weather this month means adp data will be a lot different and far better than the government's. >> we estimated that if the adverse effects of the february storms are comparable to the adverse effects of the blizzards that we had in 1996, january of 1996, that the bls report could be suppressed by anywhere between 150 and 220,000 jobs. >> there was one storm in the -- in 1996, two storms in february of 2010. the market will have to digest distortion from the weather along with positive job additions from census hiring this friday to try to understand the true state of the job market. now, separately a regular survey from duke university that came out in just the last ten minutes finds that the nation's chief financial officers expect strong earnings and capital spending this year but only modest hiring. mark, the numbers i'm looking at is they see earnings up 12% to

14% and capital spending up 9% which is a big number but hiring up only 0.2%. mr. haines? >> steve liesman, thank you very much, sir. >> sure. >> next the faber report. >> and b.j.'s wholesale is trading down premarket on fourth quarter earnings slightly below expectations. also interesting that costco has fallen as well. disappointing results there. we'll take about both of those businesses after the break. the post office is changing its business plan. should the rest of the government do the same? vote at squawk on the street.cnbc.com. this isn't just a poll today, mark. we're going to have democratic and republican strategists debate this very question. >> who is going to say governments should be run liekea business? >> republicans will. larry kudlow will say that. like a business. >> no, i'm saying who is going to say government should not be run like a business?

maybe 5% of our audience? we'll see. >> that's the poll. 

welcome back to "squawk on the street." i'm david faber. hey, you know, we've got a lot of m & a activity suddenly occurring and some interesting situations that are at least putting some opportunities perhaps in the hands of some

investors. of course, depending on how you look at it. let's start with the deal yesterday we were talking a lot about, of course that unexpected bid from cf for terra industries, $47.40 a share. what was expected was that cf's stock price would decline and perhaps markedly so yesterday. it didn't happen. look where that stock remainland. why? well, some speculation that yara of norway which already has a deal to acquire tara for $41.10 will come back and try to compete. i don't know what yara is going to choose to do. in this situation, by the way, you can't believe anything. a lot of people actually not happy with cf. they feel they were misled by management to a certain extent. they had some meetings, investor meetings and indicated they might not go after tara and might buy back stock so people not believing anything. nonetheless, since i'm getting at this point is yara may not compete. that's a big number. if you take a look at the background of the merger agreement, with tara, you'll see they were quibbling over paying a ten cent dividend.

they didn't want to go up. they went up by 35 cents. we shall see whether narway's yara and i keep saying norway because they're also norwegian. they're great in the olympics but who knows if they really want to compete here? we'll see what happens. that's one reason cf was knocked down. the other is there is some thought that agrium which wants to buy cf is going to come back. remember this, if cf succeeds ultimately in this tender and buys terra, in 30 days or maybe 45 days, agrium has no shot here. right? they haven't seen set an annual meeting at cf. so agrium and shareholders will have no opportunity to voice their pleasure or displeasure or any thoughts on an agrium bid. agrium will be done. at this point there seems to be little agrium can do except sit and wait this out. let's turn our attention to biotech. obviously mike huckman's territory when it comes to all those fundamentals but we got a lot of m & a here too.

a japanese company, $52 a share for osi, but a japanese company coming after an american company full bore. no holds barred here. we're coming after you, a hostile bid. we're going to replace your board. you don't have a pill. we're going to toss you out into the street. osi is trading well above, very early here in terms of playing defense. we'll see if any other bidders arise. some had speculated about roche. at this level when you talk to bankers, the 3.5 to $5 billion level there are a lot of potential players that might take a look certainly because there is so much focus and interest in the oncology franchise. the key drug there is tarseva which is also a roche drug that being a partnership. that would not change if there is a change in ownership. the japanese by the way indicated a year ago they might pay as much as 57, hence why the stock is where it is. we'll see what happens there. finally in biotech, don't forget carl icahn doing interesting

things. general zooim and biogwjen. he wants three seats and would take control of the company in fact. interesting to note here that he is also going after four seats on genzyme's board of directors. these are both larger biotech companies, not small like osi. biogen probably not going to find a buyer. when you get to the 20 billion level it becomes more sparse in terms of potential buyers. i don't know his strategy but interesting he's actually nominated himself for the board of genzyme even though he has a lot more money riding at biogen. then you have this guy denner i've talked about in the past who is going to be on the board of both if carl wins. that raises interesting issues. they're near each other, they compete for employees, might compete to buy companies. no doubt genzyme and biogen are competitors. not quite sure of his strategy.

we'll keep an eye on both as things start to heat up down that track. >> thank you, david faber. two big boxes reporting this morning. bj's wholesale lower in premarket. profit and sales up. but largely because of higher gas prices. costco shares, company reported higher quarterly profits but not as much as expected. fresh off bjs conference call, brian sozzi. thanks for being with us. >> thanks for having me. >> what did you hear that impressed you? >> well, i would have to say that not much impressed me. we maintained our sell rating going into this report because we saw unfavorable margin trends throughout the months of the holidays. and that was really confirmed in this conference call. and the company is having pressure in general merchandise trend and for them it's soft lines, apparel, and home goods. but they're also now having pressure within their fresh food department which had been a good story for them. >> okay. so you would not buy this stock?

>> we're leaning towards reading it ourselves. we have to run some numbers. but we are negative on the stock. we have a more upbeat stance on costco even in light of the results this morning. >> why does costco get a better view from you? >> costco as we see it has some cata lists on the rise. they have 4 billion cash, we see them actively, maybe raising the difficult denld. when you look at bj's it's about 11.5 times earnings but a much slower growth prospect there going forward for them. so it's really two diverging stories for companies that in many respects do the same thing. >> thank you very much. >> thank you. >> still to come, apple attack. the company files a suit against a taiwanese tech giant but someone else may be the real target. >> plus, mgm mirage's ceo on debt, the economy, and president obama's antivegasness.

there's a new one. here's the futures as we hit the break. back in two minutes.

here are the s&p minis. the advantage of the minis is they trade right up to 9:30. the bigger contract, the full as opposed to mini, stops at 9:15 eastern. anyway, we're slightly above fair value here. so a, as simon put it, modest up opening in the offing. >> premarket trading for apple shares right now. very similar. despite the fact that apple is launching a lawsuit against taiwan's htc over smart phone

payments. but they might not be the real target. with the story silicon valley bureau chief, jim goldman joins us live from san jose. good morning. >> good morning, simon. you know, indeed, this is one of the smart phones from htc that is at the heart of the apple action that just about everybody is talking about this week. yesterday's patent infringement lawsuit by apple against htc may be laying the groundwork for a bigger action against a bigger rival. sure some htc smart phones running google's android operating system look and feel like apple's iphone but looks only take you so far. apple claims htc violates at least 20 patents, some 15 years old, and this is as much about hardware as it is software. that's why all of this may be a prelude to a broader infringement suit by apple against google. some legal experts say the htc complaint can be modified only slightly to target google just as easily since many key components in android as well as google's own smart phone the nexus i might be based on the

same apple technologies. why go after htc first? simple economics really. apple has deeper pockets and stands a better chance of outlasting htc in court or sealing some kind of settlement to establish a precedent. if that gets done apple stands a better chance of victory against google and its much bigger cash war chest. with yesterday's release, they included a comment from steve jobs, himself, rather than the company's corporate counsel in announcing the htc action. jobs said, quote, we can sit by and watch competitors steal our patented inventions or do something about it. we've decided to do something about it. htc says it hasn't had a chance to review the extensive apple filings but is confident this all will not affect its q1 results. i get the feeling we haven't seen the end of this deal as far as it affects apple and google. back to you. >> all righty. thank you. final countdown to the opening bell on the other side of the break. >> shares of mgm soaring more than 250% over the past year.

but this is a company battling huge debt issues, fighting a wounded economy and perhaps trying to come back after some harsh words to say the least from the president of the united states, the ceo of mgm mirage is here right after the bell. we're back in two minutes.

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you are watching cnbc "squawk on the street" live from the financial capital of the world where the opening bell is going to ring in a little less than three minutes. in the headlines right now, adp jobs report. a loss of 20,000 private sector jobs. that was better than expected but bear in mind the adp report is frequently way off base. shares of pharma company medivation fall sharply after their alzheimer's drug failed late stage trials. stock down 70%. ceo coming up in the next hour. greece promising tax hikes and spending cuts. that's helping boost european

markets. unions in greece vowing to strike. >> again, two minutes before we actually open up for floor trade let's get to michael gurka global asset strategist with empower global funds. what are people talking about? why have we not got more direction? >> simon. what a cue we get from europe on a daily basis and even though it seems as though things have changed, in mindset, you're still seeing kind of a strong market in the dax in germany in particular. 5757 was a 50-day moving average we've exceeded and in the same regard seeing france down almost 3% or over 3% on the year starting to struggle with some of their returns. i think the u.s. is still looking healthy here with regards to earnings and i think that's one of the reasons why the mindset at least from a mentality standpoint in the u.s. is looking better. >> what about the situation with the jobs report and we've had a lot of fed commentators, members of the federal reserve, on the air over the last 24 hours

talking about the low interest rates. i mean, what is the market expecting? what is the baseline from which we'll move either side? >> i think what you do is you just look back 30 days or more. actually what's concerning to me if you want to talk about the baseline, was the revision on that adp we just saw for january. i think that's not the kind of form that we need to see in the market. we need a little bit more stability with the emphasis that we're actually going to be disappointed on friday's number. i do want to note that there are some strong currency crosses that continue to exceed. one of them is australia. against the euro. and the other is the strength of canada to great britain. until i see some of those start to turn, it's still showing me that there is a shaky nature to sterling and the euro and of course equates into a stronger dollar and then of course how bond rates are going to start affecting the market. again, 1144 is a big level in the s&p on a two-year retracement. i would like to see the market trade up to those levels and then we'll see if we get the bearish tone that comes over from europe.

>> okay. michael, thank you very much. have a good day's trade. >> thank you. >> all right. here we go. opening bells in less than ten seconds here at the big board. the president of the north american chilean chamber of commerce of new york. we'll speak to him about the economic recovery in a few minutes. at the nasdaq, myriad genetics. mygn. >> our market reporters are standing by. but we kick off with bob pisani who is now returned from his vacation in latin america. >> thank you very much. all the talk about greece, the viable plan it looks like to reduce their budget deficit. not having a huge impact on europe and not having a big impact here in the united states. some stocks are moving. toyota motors looks to open higher, up $2.40, one of the best days toyota, certainly one of the best openings toyota has

had in a long time. very mixed reports on the retail front. bj's wholesale a disappointment. not only did they miss estimates but guidance was also below expectations. there was a lot of talk about how winter storms might affect things. bj said winter storms had a negative impact 2% to 2.5% on comp store sales though the super bowl had a big impact too up about 2% so it was a bit of a washout. big lots a little better. they topped their estimates. their guidance also is a little better than expected. they're also very big on a new buy back program, $400 million for them here. ethan allen also a bit of a surprise. we got a 9% jump preopen. they revealed they had improving traffic this year as well. trader talk.cnbc.com. bertha, how we looking at the nasdaq? >> pretty good. it's been the small caps of late that have out performed because of so much m & a activity these days. novell is one of those examples already up 14% year to date. today at a fresh high. the company is being solicited to be taken private by a hedge fund that already has an 8.5%

stake. they say they're considering that bid. meantime osi pharma at this moment unchanged. right at 57 dollars. $57 is what the board says astellas, that japanese company that wants to take them over, had offered back in february. that's why they think $52 is too cheap. but they say they are considering that bid. finally medivation off nearly 70%. mike huckman will have the ceo in an hour on a failed alzheimer's drug. back over to the nymex now. >> bertha, thank you very much. oil is above $80 a barrel. and there seems to be support. most of the traders telling me the bias and the trend is to the upside. we were negative in nat gas but that has turned around as well. we look at that as trading at a bit of a discount to nymex sweet crude but it is to the up side of course with the focus on the euro and greece. i want to focus on gold here because it has turned around. we had touched six-week highs. we have a softer dollar index and even dennis gartman saying he understands why people are buying dollar denominated gold but now we're negative so keep

an eye on gold. we've seen a bit of a reversal here when we had touched six-week highs. rick in chicago? >> thanks again, schacht. you know, the "new york times" had a story in that everybody's giving me today. for some reason they have an issue with the gma chief getting $26,666 a day, $1.2 million for 45 days' work. that's what people are talking about. they're also talking about a half hour the ism nonmanufacturing. we want to pay close attention to the employment component because as you recall, the employment component and the manufacturing survey earlier, well, that was at a five-year, three-month high. so manufacturing at least showing that jobs issue. we had adp today. it could have been worse. the revision was worse. in terms of the dollar, to pay attention it that 136 plus area, the euro currency is holding to the up side. mark haines, back to you. >> thank you very much for that. well, let's just change tacks

slightly. the recovery effort is under way in chile in the wake of the earthquake with the death toll in excess of 800. joining me now is the president of the north american chilean chamber of commerce and flanked by chile's ambassador to the united nations and their counselor general here in new york city. you are aiming to raise awareness. what is your message to the american people? >> we are making an appeal for solidarity with our country. we have two million homeless people. the country has been seriously devastated in the south of chile. we appeal to all of our friends for contribution and assistance. >> if you have two big earthquakes as we had with chile and haiti back to back, it might be inevitable but it's still quite harsh that the fund raising effort if you look at the american red cross, if you look at world vision, it's coming at less of a rate for you than for haiti. >> you're absolutely correct.

those are the facts of life which we accept. but we do have -- >> do you need the charity? you clearly are a richer country. >> we are a richer country no doubt. we are very established, a well organized country, but certainly we do have needs that we cannot really resolve immediately. >> what are those needs? >> especially in terms of basics, like water, housing, temporary housing for 2 million homeless people, basic food. those are the basic needs right now. >> we read that in concepcion there is an 18-hour curfew because of looters. some people have taken matters into their own hands, blocking -- road blocks in the streets to determine who is allowed into their neighborhoods. what is the security situation? >> well, i think the government is under control, the first 48 hours caused chaos in that area, but today things are very much under control.

>> okay. thank you very much for that. >> thank you. >> we wish you well. mark, back to you. >> all right. thank you very much. mgm mirage as my partner today would say. got a welcome reprieve on their debt this saturday when lenders agreed to defer repayment until 2014. it was due 2011. does this mean the future is clear for mgm mirage and what about the rest of struggling las vegas? here to talk about it, chairman and ceo of mgm mirage jim murren. good morning and thank you very much for being with us. >> great to be with you. thank you. >> let's deal with the company specifically. first you renegotiated this debt. to the layman it looks like you did it in plenty of time, a year and a half from now. yeah. year and a half from now it was going to be due so you're well in under the wire. >> well, it was an overhang, mark. people were concerned that we wouldn't be able to pay this back next october so we really focused on it late last year and now as you say we have four

years to redo a deal down the road. we feel very good about that. >> how did you get in so much trouble debtwise? bad management? >> horrible management. no, we spent a lot of money and we built the largest project in the u.s. we built city centers, an $8.5 billion project that opened last year and we did so at a time when the economy was falling apart. and so the debt rose as we were acquiring the assets of other companies and as we built city center and now since over the past year our debt is starting to come down again. >> now, vegas has suffered in the economic downturn. hasn't it? >> very mightily. probably more than most any economy in the u.s. >> david faber is going to join us in a moment. is that a result of, i'm trying to separate the housing issue from the real economy. if vegas hadn't been a hot housing market that got over extended, would you have had as

much trouble? >> we would have -- the housing market was a by product of a hot economy in las vegas. it wasn't what drove the economy up. the tourists drive the economy up in las vegas. and so when we got hit, it was actually the end of '07. the economy started rolling over then. i wasn't smart enough to recognize it. >> few were. >> but it was ugly and beginning in 2008 and it got just worse and worse as you know in '08 and '09 and it was the tourism and the convention business, the whole business activity that took las vegas down for the last two years. >> david? >> thanks. david faber in englewood cliffs. you mentioned city center of course, where investors are focused. it's been open a short time. are there any metrics you might be able to share to give us a sense as to what kind of business you are seeing there? >> well, sure. thank you. it's good to hear from you. our business is building every single moment right now. it opened in december as i said. we have now been -- we started

with about 60% occupancy rates at aria and are now over 80%. our call volumes which is people calling in to make reservations, starting to build up. our convention business, which is as you know a difficult thing to do when you first open up a property, the convention business is starting to build for the second half of this year and into 2011 and the traffic through city center, we're seeing tens of thousands of people a day now walking through the various components of it, so it was slower opening up than we would have liked. the economy is still healing slowly as you know but the business is starting to build. >> right. now, jim, i am hearing that while bookings may be up, prices are down. is that true? >> prices are very low. average daily rate is about 30% lower than it was two years ago. but they've firmed. >> three zero? >> three zero. and of course that makes las vegas a value destination. it is an incredibly affordable

place to go now. prices are starting to edge up. our rev par, revenue per available room is still down year over year but down single digits whereas it was down as i said, mark, down 30% at one point and we are going to turn positive in rev par. in other words pricing for our rooms we think will be higher in the second half of the year versus the second half of last year. >> finally, on city center, first closings of the condos coming up or near or happening? can you give me some sense there? >> yeah. we've started closing the mandarin oriental. and at very high prices per foot. we did lower the prices there on the condominiums. we had to because of the economy forcing us to do that by 30%. but we're starting to close units. we've closed about 15 so far out of the 200 and we think we'll be done with mandarin by the middle of next year meaning that we would have sold all of them and we'll sell the rest of the condominiums over the course of this year and next year. >> have you invited president obama out? >> he was out two weeks ago.

i worked out with the guy. yeah. he was out two weeks ago. >> what about his remarks about vegas? >> we didn't like them. we didn't like them. >> not surprised. >> we feel like it was nice to have the president of the united states in las vegas. i think he saw that we are a community of hard working men and women that are trying to do the best we can and he soak at aria our new casino at city center and gave a rousing speech and he said he loves las vegas. so i'll take him for his word. >> we have to leave it thru but we thank you very much. appreciate your time, jim. >> thank you very much. >> mgm mirage, jim murren. >> we are 11 minutes into trade. let's look at the markets now. up moderately positive as you can see. we'll go inside the numbers and talk to two money men about how they're playing the situation after the break. and the great american jobs debate. as we close in on friday's big employment number, we'll look ahead to see which way the numbers are likely to go. national car rental? that's my choice.

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hi folks. welcome to "squawk on the street." the market is looking for direction but joy global has found its direction, it's higher, the second best stock on russell 1000. gapping higher after better than expected results. a 73 cents a share versus a 64 estimate. the revenues were down about 3%. they came in well ahead of numbers. the best stock in the russell for the record is novell. dineequity big move. 76 cents versus 15. head scratchingly curious but the lower costs and fewer writedowns have this parent

company of applebys and i-hop on the fly. back to you. >> thank you. time for commodities corner. prices up, on copper, new concerns from chile the world's largest copper producing nation. prices rising as you can see during the course of the last two sessions in reaction to saturday's earthquake. most of the copper mines as you may have read in chile are in fact north of the impact region. chile as it's pronounced on american television, not chile. >> i think they call it chile in chile, too. having never been to chile -- >> what do you buy in the supermarket? chilis or herbs? >> i buy herbs. >> correct. >> yes. >> everybody else seems to have herbs. sorry. >> well. >> aren't we getting a little uppity coming from somewhere else? >> from england. >> anyway. a quick check, yes, i know the

mother country and all that. a quick check on the markets. the dow right now up 20! the nasdaq up three. and the s&p up 2. your cnbc edge now with eric thorn, trust me, they got a lot of wealth in bryn mawr and jack, research financial strategies chief investment officer. eric, i'll start with you. is this market now back in gear to the up side? >> well, first of all, mark, i think it's chilean sea bass so you're correct on the pronunciation. >> i know i am. >> i think you got it. you know what? the market in our view is going to have actually a pretty good year. the economy is going to continue to recover albeit at probably a slower pace than a lot of investors expect. it is likely to happen in fits

and starts and have buying opportunities along the way. right now we're much more positive on stocks than in a long time. we have been looking for a 5% to 10% pullback. about a month ago we got that pullback. now we're back into buying mode especially in the small, mid cap, and international areas, taking advantage of some of the problems being seen in countries like greece to pick up shares overseas and we're very excited about the prospects over the next 12 to 18 months. >> jack, what do you think? >> i continue to be cautiously optimistic. i like the stock market. it is coming back from its correction of last month but i really think we still have at least three serious problems that are going to hold back stock market growth. number one, we still have very weak unemployment. that has me concerned. business credit as you know is at an all time low. some 600 billion of credit was removed from the market last

year. small businessmen cannot borrow money. and the statistic that people sometimes ignore, your foreclosure and late pay rate with homeowners is up to 15%. >> okay. >> and that's a serious issue that's going to affect future stock market growth. >> your caution duly noted, what part of the stock market do you like the best? >> if i had to be a buyer right now i would be in technology. technology is going to continue to do well. with national security and defense spending. i like utilities. absolutely commodities. commodities were the big winner over the last ten years. >> okay. >> and commodities will continue to do well i believe for the next decade. >> eric, same question to you. we're running out of time. >> i think technology makes a lot of sense here. you look at a lot of big companies that have had tons of layoffs, merck and pfizer, companies like this. i think the problem is these companies are going to be very reluctant to rehire folks because of the health care benefits. you have to pay an awful lot of

money not only for wages and salaries but for the health care benefits. so companies are going to be upgrading their technology systems. that's a lot cheaper, a lot more efficient, and they're not going to have to pay benefits. >> all right. eric, jack, thank you very much. now back to the foreign guy. >> thank you. >> next, the debt threat spreading in europe making the u.s. dollar look more attractive. how do you profit from a stronger greenback and go long of the dollar if you're in america? >> how does a british guy question how we're pronouncing a spanish word? >> because we're talking in english. >> well, how does a guy from overseas -- where do you get off telling me about english? you're not from america. anyway, check the street poll. in the wake of changes from the post office, should the government be run more like a business? or -- i don't think i'm going to read the rest of that. let's just leave it at that.

should the government be run like a business, yes or no? hi, ellen! hi, ellen! hi, ellen! hi, ellen! we're going on a field trip to china! wow. [ chuckles ] when i was a kid, we -- we would just go to the -- the farm. [ cow moos ] [ laughter ] no, seriously, where are you guys going? ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! [ female announcer ] the new classroom. see it. live it. share it. on the human network. cisco.

earlier we were reporting

from athens and madrid about what europe is trying to do to control the p.i.i.g. problem there but how does that affect us here in the united states particularly if the dollar is going to continue to rise? joining me now is mark chandler global head of global strategy at brown brothers and axel merck president of the merck mutual funds. mark, how do i go long of the dollar if i'm sitting in america? >> i think what you have to understand is many americans have taken a large part of their investment, equity investment and put it overseas. many americans have been chasing their 401(k)s to high returns. i think what's going to happen going forward is americans will keep a little more money at home, to strengthen the dollar. the uncertainty about what is happening in the rest of the world r.o.w. makes people more likely to keep their money at home and that will also help the dollar. >> axel, there's a tradeoff isn't there between the moves you might get on the currency and the huge bet on the emerging markets? where do you land? >> well, i land firmly in the value opportunity. everybody is bashing the euro which tells me the euro might be

the great buy out there. everybody wants to buy stocks. there is an unsustainable recovery in the u.s. we haven't allowed deleveraging to take place. to be cautious where do you put your money? the euro zone has been battered. one thing people under estimate. everybody talks about the inability of people to rein in spending. in europe they're at least trying. in the u.s. spending is only restrained by the popular opinion. there is nothing that stops congress from spending money but in greece the entire euro zone is bashing greece to do something and as a result what we expect is the euro zone will lack growth but the currency will be much stronger so people may want to buy the euro here. >> mark chandler, i don't know how you guys can play the currency markets. it wasn't that long ago that the dollar was on its way to hades in a hand basket. you know, the deficit and all

that, you know, all of a sudden crisis in greece and everyone wants the dollar. king buck again. >> the dollar basically stands on two legs. one leg, stronger leg right now, is bad things happening in europe. there is another leg that's going to grow and become strong and that's more positive things in the u.s. during this crisis we've created this big output gap. we're not producing nearly as much as we can. in some ways the contest is who is going to close the output gap fastest? given what we saw last week, 5.9% growth in the u.s. in q4 last year, looking at something say 2.5 and 3.5% in q1 much faster than the euro zone will be able to grow. over time closing the output gap could raise profitability, boost earnings and lift the u.s. economy as a whole faster than other countries. >> you want to be long the dollar. >> long the dollar. i think the dollar, long-term bottom back in late '07, early '08, and we haven't seen those levels again and our next leg has begun. >> let's give axel a chance to say, long or short the dollar,

axel? >> well, what we have is not really had much change over the last year. we have two major forces play out. on the one hand the market force that asks for contraction, a flight to quality, flight to the dollar. >> long or short? >> i am short the dollar because people are going to wrap up the printing press and the u.s. is far more efficient at printing than the rest of the world is. >> thank you very much. next, the u.s. economic services sector plus a five star man's advice on the market. >> and the story of the day an alzheimer's drug with a lot of promise floms. the ceo will be with us on "squawk on the street."

welcome back to "squawk box." february, nonmanufacturing ism service sector 53.0 better than expectations. better than the 50.5 for january which happened to have been the highest level since may of '08 so this is going to give us an even further comp and post this number. we see that rates have firmed up about three or four basis points on a ten-year but somewhat home on the range so to speak.

dollar index everybody is watching down 30 and now it is down 28, 29 so no significant change there. this hasn't altered the landscape much but we'll parce through all of the sub texts, look at things like employment numbers and keep you apprised. now breaking news. steve liesman at hq which is going on? >> rick, in a kind of unusual letter, six financial trade groups have sent a letter to chris dodd and shelby arguing that the fed needs to remain a banking supervisor. they are saying that monetary policy requires that they be a banking supervisor. what's unusual about this letter is it includes the american bankers association who are sort of the lobbyists for maybe the larger banks and also the independent community bankers, you know, can't find -- ken fine a frequent guest on cnbc, both large and small, different parts of the financial industry coming together and arguing the fed

needs to remain a banking supervisor as they've been out in force arguing the fed needs to retain that power to do monetary policy correctly. it comes as barney frank the chairman of the house financial services committee is saying maybe his words were misconstrued yesterday by the "new york times." he does not support keeping consumer protection for financial services inside the fed though he does say he might take a look if it were inside of treasury. back to simon and bob. >> thank you very much. bob pisani is back from trekking through the southern part of latin america. with these fresh eyes how do you see the market, bob. >> mildly optimistic about what's going on. i want to note that the russell 2000 is just hitting a new high. that's the small cap index. it's been out performing big caps for the last several weeks so right now new 52-week high for the russell 2000 with finally some news out of greece that they're finally addressing those problems. >> it's getting a little better at least and the attention has been turning to what's going on

here in the united states. i've been mildly encouraged, some of the retail sales reports this morning, some of the sales from the restaurants, dineek wilty, the company formed when appleby's bought i-hop and their numbers were remarkably good at this point. they're paying down debt. appleby sales have been improving, improving margins, that's helping the restaurants move up. in the furniture group you would think ethan allen would be dead at this point. who is buying a lot of furniture? in fact their orders are improving. tremendous control over costs. up very nicely today and bringing a lot of the furniture makers along with them like fbn and some of the other brands out there as well. i think that's mildly encouraging. mixed reports on the wholesalers and retailers. i think bj's was a little disappointing here. people were trying to figure out how much is february -- is winter going to be affecting sales? it hurt them about 2.5% on same store sales the big storms. >> thank you very much. let's get to bertha coombs at the nasdaq. you've got interesting stories there not least in pharma. >> what's interesting simon is the small caps today that are attracting all the attention.

novell is up about 28%. that on a takeover bid from a hedge fund. meantime medivation is the company that's doing an alzheimer drug, the trial failed. the ceo will be on at the bottom of the hour. despite their big drop, biotechs this morning are pretty strong. couple of firms nektar and others are on the back of their earnings looking better and moving higher. we're also getting strength from chip equipment companies. on the earnings front joy global is one of the winners. costco and jakks pacific are the losers disappointing the street. back to you. >> brian, how are we looking over at the nymex? >> simon, the bias is still to the up side but the range is so tight from the highs to the lows today less than a dollar. we reached the highs of the session actually when rick came out with that data and we pulled back just a tiny bit so we're positive, maybe the next catalyst is the eia numbers that come out in about 25 minutes.

the expectation is for a build in gas and crude according to platts but a drawdown in distallates. the number showed a much larger than expected drive down in distallates. we'll see what happens with that and if it moves markets. natural gas was negative and did turn positive despite moderating temperatures and other headwinds like supplies but it is to the upside along with heating oil right now. back to you, mark. >> all right. jobs in focus. greece has a plan. lots of fed speak this morning. how do you find opportunities in a market like this? patrick cunningham managing director with manning and nappier. out performing the s&p 500 for 11 straight years. also with us the cio with harris private bank, who is probably going to go back and buff up his resume after he heard -- >> i know. >> right, jack? >> yeah. the resume envy here. >> well, i don't think we're

worthby let's let patrick lead it off here. how are you doing this, 11 straight years outperforming the s&p? >> well, i believe the key to success in this business is having a process and adhering to it consistently through all different types of market conditions. and that's what we've done since our doors opened in 1970. it's a very fundamental, value oriented pricing disciplined approach that we look at all markets. >> a regression. mean and the odds of you continuing this are -- >> i -- >> really against you. >> sure. the truth is that it's not our goal to beat the s&p 500 every year. i mean, our goal is to give good, absolute returns for our clients. for example in the decade of the 2000s the s&p had a return of negative 9%, a cumulative return versus our fund which had a cumulative return of above 60%. a million would be worth 910,000 in the index fund and it'll be

worth a million seven with our funneled. we call that success not necessarily beating the s&p year in and year out. >> well, jack is no stranger to success. jack, where's your money right now? >> yeah. so, mark, we've taken a position or added to our position in commodities. we took money out of international stocks about a month ago. here the argument is if overnight interest rates can't offer protection against the erosion of inflation, then we've got to go somewhere else and that's where the commodities position resides. international, emerging market stocks, we think are expensive, even though we are believers in the emerging economies. i think there are some better places to play it. more likely here at home. i'd rather export some, you know, key pieces to the emerging economies and play commodities than, you know, jump in with both feet in the emerging markets. >> amazing how things have turned around in the last three months. three months ago everyone hated

the dollar and wanted foreign stocks. now it's done a 180. where do you want most of your money? >> we are looking at multinational companies. we think that long term there is not a lot of pressure for the dollar to go up. it's going to probably trade in a range and probably go down. even though it's rallied 8% since the beginning of december the long-term trend we think is flat to negative. so companies that can compete successfully overseas, it is one thing to be able to compete in the united states where you know the language, customs, regulations. if you can do that successfully in 25 other countries around the world with vastly different cultures that means either you have an excellent product or service or excellent management and in many cases both. so those are the types of companies we're looking for. >> okay. patrick, jack, thank you very much. got to move. >> 40 minutes into trade almost stocks making the moves so far on the dow. caterpillar, the biggest percentage gainer up 1.5%. pfizer the biggest loser.

novell soaring more than 25% on an unsolicited takeover bid from elliot associates. big lots and ethan allen both hitting 52-week highs this morning, mark. >> coming up, trading fridays jobs report. can it be done? i don't know. plus, medivation getting crushed. ceo talking to "squawk on the street" first on his plans to get back ontrack. >> then politicians need headlines. executives need profits. would we all be better off if the government ran like a business? a street fight later on -- a street fight? >> yes, a street fight. right. >> between street people. >> that's what we do here in america. >> and capitol hill. >> let us know what you think. vote at squawk on the street.cnbc.com. >> and as we head to the break, some of this morning's big stock winners.

real time flash. matt nesto. welcome back to "squawk on the street." dan the man, dana corp big move today up 5%. thank you, goldman sachs. conviction buy list. i think the stock is headed to 16. you can see it's good for, well, we'll call it 4% now. nice change on the week as well. blackstone also with an upgrade to out perform from perform at

oppenheimer. they think the stock is headed to 2050. 2% higher today. almost 3% for the week. ups initiated conviction buy at goldman with a $76 price tag. interestingly, rival fedex initiated neutral and then lastly safeway the worst stock in the s&p 500 right now down about 2% and this after giving cautious, full-year guidance less than estimates. let's get over to david faber for the very latest faber report. >> thank you, matt nesto. important day to day for simon properties. ggp and potentially brookfield, a hearing in front of a bankruptcy judge who will decide if ggp's, that is general growth properties, exclusivity, its right to continue to negotiate its own exit from bankruptcy will be extended another six months. now, the judge in this case as in most of these cases in front of a bankruptcy court has a great deal of leeway.

he can say all right. i will grant you six months thaw want. i'll give you three months. i'll give you two days. we'll see. anything less than six months may be viewed as a victory by simon, which of course as our viewers well know is offering what they say is a $9 a share for ggp, a fully financed $9 billion of cash offer that will give unsecured creditors par plus accrued in cash equity, may also up for simon equity and again is supported by the unsecured creditors. as for ggp, well it's come back with its own plan that it at least is pursuing along with brookfield that on the simon side they would say is very conditional, carries a great deal of risk because it includes raising a lot of money, $2.6 billion of $8.5 billion committed by brookfield, requires at least a $3.3 billion equity raise, $1 billion from asset sales, $1.5 billion debt

issuance. you get the picture. also not supported bai yun secured creditors. this is a very odd bankruptcy case if you will. one in which the equity holders have a good deal of say because there is a lot of equity value here. i've said this before. of course do you have an enormous amount of debt, as much as about $28 billion when you add both secured and unsecured. but you do have about $3 billion or $4 billion of equity above that. any move in terms of the value of course has a lot of leverage in terms of what the equity is worth. but ultimately that fight is taking place. will simon hang around for another six months if in fact the judge grants exclusivity for that amount of time? that's an open question. we'll come back and perhaps offer a bit more. that's what some are wondering and certainly betting on. we shall see. we may learn something in fact today about that judge's decision in terms of general growth. mark, back to you. >> thank you, david faber. just ahead, more than 8 million jobs lost since the recession

began. how many are gone forever? how many will be back sometime this year? we're building up to friday's key jobs report. >> and a futures market that's going hollywood. find out when you can start placing your bets on the next big blockbuster or flop. we've secretly replaced these diners' at&t smartphones

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west coast wakeup. phoenix based us airways says storms in february cost the airline $30 million in lost sales as it had to cancel more than 7% of its flights and we are just learning that us airways captain sully sullenberger the hero of the hudson will be retiring from the airline today. he lives in california. maybe he'll run for governor. meantime, 15,000 city workers in san francisco face layoffs or smaller pay checks as mayor newsom tries to close the half billion dollar deficit as the business index says small firms are hiring again, considering a leading indicator of job recovery. toyota is hoping twitter can accelerate damage control. using the website to launch a channel on tweet called toyota communications. as loss winds down for disney's abc gilligan will soon be ma roond again. warner brothers plans a remake of "gilligan's island." let's hope the running time is not a three-hour tour. julia? >> thanks, jane.

cantor fitzgerald's cantor exchange will launch a futures exchange for the domestic box office next month. yesterday the commodities futures trading commission lifted its stay on cantor exchanges application. now the exchange will open april 20th and trading will begin days after. the futures exchange will allow professional traders and movie fans to bet which movies will be hits and which will be bombs by shorting and going long on futures contract. traders will bet on a movie's first four weeks of domestic box office. each contract will be priced at 1 million of the ticket sales projection. if a contract trades for $100 it's predicting a hundred million dollar box office gross. if the movie grosses more the contract is worth more and vice versa. trading begins six months before a movie's release so early believers in a surprise hit like "the blindside" would have struck gold. before its release traders on cantor's site bought contracts for 44 bucks predicting a $44 million four-week gross. the "blindside" brought in three times that. if you bet that last weekend's

copout based on the star lead bruce willis would be a huge hit you will likely end up losing money. the performance so far has been disappointing. movie studios tell me they're still trying to figure out what to make of cantor exchange. independent film makers could potentially used high priced contracts if their movie is getting a lot of early buzz to help attract more financing. simon, the president of cantor exchange will join me for an exclusive interview coming up on "the call." back over to you. >> can you just tell us where that leaves you on insider trading then? >> there are a lot of questions about this. questions about what it'll mean and also if the movie studios are going to be protesting this. now, the actual price of the contract is set six months earlier so people are shorting and going long but if people have seen a movie early that does raise a lot of questions. >> or work for the spots department. julia, i'll watch that interview with interest. thank you very much. good morning and welcome to the third of the third. an unbelievable move in shares

on medivation this morning. the ceo talking to cnbc first about salvaging the failed alzheimer's drug and indeed now the business's future. plus, senator graham declaring cap and trade dead. reaction from the ceo of energy energy as he goes head to head with lawmakers today on capitol hill. keep it score.

the adp data today showing the private sector lost 20,000 jobs in february.

that's the least worst data we've had for two years. you've got the weekly jobless tomorrow and of course the big employment report comes out on friday. but we have the daily jobs report every day here on "squawk on the street" and we bring in the chief u.s. economist with deutsche bank and indeed a cnbc contributor and steven gail herregail -- galaher. tell us what your expectations are for the big one on friday. >> for the big one on friday we're looking for a decline of about 50,000 which would be weaker than the adp report. we're a little surprised by the adp not picking up more of a weather influence or just more damages from the snowstorms that should have cut back on a lot of employment. they saw no evidence of it. they cited it as not being that severe in their survey but they think it should be more for the bls or nonfarm payroll on friday. it's just weather on that. i mean, if it weren't for weather we'd probably be looking

for a positive, nonfarm payroll on friday. >> so reading between the lines in what you're saying, you are actually quite positive then because assuming that the weather did have an effect, still as far as you're concerned, the numbers are quite good. not with standing the fact that we had a big revision on january. we lost 60,000 jobs. we are now told then whereas if the original report was it was only 20. >> yeah, adp made a lot of revisions. you look back a couple more months they actually cut back a million jobs so they actually did a lot of rebasing it to the new, nonfarm payroll type numbers. each month they're trying to do that rebase back to nonfarm payroll to try to improve their ability to guess at this monthly report but i don't put a lot of stock in their revisions. >> joe, what is the value of the adp report? >> i don't think it's very high. i think steven was on the right track. if we look at the initial print and compare it to the payroll number, man, there is massive

divergence. we've had months where the thing has gotten the wrong sign. i think one of the reasons we were optimistic when it came out that it would work is that there wouldn't be revisions. it was a snap shot of actual company data and instead really all they've tried to do is refit it back to the bls numbers which i think really kind of has watered it down, has made it basically much less valuable than what we thought it used to be. >> aren't we going to have to take friday's report with a large flake of snow as opposed to a grain of salt? >> it is, mark, if the number is negative, and within the household survey we see there was a big increase in weather workers meaning people who cannot go to work because of the weather i'd say yes but where we are nonconsensus is on the unemployment rate. we think it will fall a couple ten ths to 9.5. >> thank you both. >> thank you. >> weather workers is an interesting phenomenon. manhattan was very clear i know at the end of last week after 13 inches of snow. you could get through the

streets but there weren't many people on friday attempting to do that with the schools being off. i think there are more weather workers in a city like new york than you might expect. >> well, you do have a well enforced city ordinance that says you are responsible to clear the sidewalk in front of your building. that helps a great deal. then of course you get to the corner and that's where the problems begin as you try to navigate the piles of snow in the intersections. anyway, the fight for energy and climate change legislation reaching a breaking point in the senate. republican senator lindsay graham calling a proposed cap and trade plan dead. but democratic senator john kerry remains hopeful a compromise can be reached. we have the ceo of nrg energy one of the largest utilities in the u.s. on capitol hill today to make a push for a cap and trade agreement. good morning, sir. thanks for being with us. >> thanks for having me. >> first, why don't you quickly summarize why you think cap and

trade's a good idea. >> well, i think the important thing is what we're talking about now in terms of senator kerry and graham's effort you wouldn't call it cap and trade but mainly an energy bill. it will put a price on carbon. and to me that's a tremendous opportunity for all of us in business because i think the great opportunity we have is in terms of the clean energy economy and from the public policy makers' perspective doing something about national security and weaning our country of our dependence on foreign oil. so i think it's really energy first and a price on carbon second. >> and where does most of your energy come from? >> well, most of our energy, the electricity we make comes from coal, nuclear, and natural gas for the most part. >> and, you know, i'm impressed. a man who burns a lot of coal still in favor of doing something about the carbon footprint. >> well, i mean, i think coal is going to stay part of the future but i think the bigger part of the future is it's going to be maybe clean coal if coal can be made low carbon but

overwhelmingly i think for a base load power in the united states the future is going to be nuclear and i think that kerry, graham, weaver, will have a very robust nuclear title something very different from the house version and we at energy hope to build one of the first new nuclear plants in the country down in texas. >> just before i ask you about that, you kind of side step the whole climate warming debate which of course is something that the senators will not be able to do as they attempt to push any legislation through. how damaged do you think that is by the revelation that, you know, there were untruths on the himalayan glass yers in the big report for the united nations or indeed the e-mails in the uk that suggested that scientists had squelched others who disagreed with them on the idea that humans are to blame for global warming? because that really has cut to the heart of the debate in this country. >> well, you're right. i think there's about a lot of talking around what happened, the issues you're talking about, but i think from a businessman's

perspective the science is settled. we are beyond that. we're now talking about the business opportunity that is arising because of the science and the rest of the world is moving to a clean energy economy. and right now china, other parts of the country, it's no coincidence that abu dabby sitting in the middle of the persian gulf with the oil and natural gas is filling a bunch of new nuclear power plants and we want to be part of that opportunity and want american business and american workers to be part of that opportunity as well. and to create that opportunity we have to have a market for clean energy economy here in this country so that we can combine american entrepreneurialship with -- >> but even if you get the loan guarantees from obama as he is beginning to give now, it's going to be four or five years, maybe six before any of these nuclear power stations come online and it's still only a fraction, the industry, all of you talking at the moment, only a fraction, isn't it, of the total energy usage in the united

states? you're talking about adding in ten years maybe what we added in wind power last year. >> no. i don't think that's exactly the case. i mean, just our nuclear plant we want to build in texas is 3,000 megawatts but also you have to look at energy production because remember nuclear plants work at 95% capacity factors. wind farms work at 20% capacity factors. so a few nuclear plants is a large part of the production and the major thing is also it's a start. we haven't built a nuclear plant in this country in 30 years and so if we can build four or five or six units in this decade then we can build 20 units in the next decade and a hundred units before 2050. >> all right. david, thank you very much for your time. i'll watch with interest how you get on today. >> thank you. >> shares of medivation getting crushed. its experimental alzheimer's drug failing to meet end goals in a pivotal study. pharmaceuticals reporter mike huckman back at hq is with the ceo of medivation in another

first on "squawk on the street." mike? >> good morning, simon. and it's an unfortunate but perfect example of the risk of investing in biotechnology. yesterday shares of medivation hit a new high. this morning they're at a new low. the average daily trading volume is more than 600,000 shares in this stock an hour into the trading day though more than 22 million shares have changed hands. so joining me now first on cnbc, live from san francisco where medivation is headquartered is the company ceo. i won't even say good morning because i'm sure this is a difficult morning but thank you for being here. >> thank you for having me. >> how crest fallen are you? >> we're very disappointed by the results especially for alzheimer's patients and their care givers. i think there was a lot of hope for this trial. but i want to put it in some context. we've had three human studies so far. two have been positive. one in alzheimer's one in huntington's disease. today's result was not positive.

this is just one battle in our war against alzheimer's disease and we intend to continue that battle. >> but it is a major battle, a mid stage study showed promise that your drug actually might work on alzheimer's patients so what happened in this larger study that you saw absolutely no benefit with the drug versus a sugar pill? >> well, we're very surprised by the results and we're working with our partner pfizer to figure out what happened in the study. that's a work in progress right now and speaking of pfizer, how much does this failure in this study increase the odds that the company is going to back out of its partnership with you? >> we can't speak as to what pfizer may or may into the do but to put this in broader context we at medivation are committed to finding therapies for patients and families that suffer from horrible diseases like alzheimer's disease and huntington's disease and we intend to continue that. as a company we are well positioned. we have three phase three

programs, huntington's, alzheimer's, and prostate cancer. we have five phase three trials, two strategic partnerships, and a very healthy balance sheet. >> dr. hung, do you think there's any possibility that when you and all of the scientists have an opportunity to really dig into these data and comb through it with a fine tooth comb, that you might find a subset of patients or maybe a subset of a subset of patients that actually benefited from the drug? >> well, certainly we're going to look into that. that'll be important. but i should remind you also that there are four other pivotal studies ongoing today, one in a one-year alzheimer's study of patients who are taking other alzheimer's medications so a different study than the one we just talked about today. we also have two other studies, moderate to severe alzheimer's, and a fourth study in huntington disease so we have a number of shots to try to show benefit of this drug. >> the earlier study was actually done in russia where this drug was on the market

actually as an antihistamine. and this study was done in a bunch of different countries so not to cast aspersions on russia but could that have skewed the results to the plus side in the earlier study and by the same token could this multinational study have skewed the results to the negative side because so much of the alzheimer's data is gathered anecdotally with interviews and cognitive tests with patients and care givers? >> we're looking into these issues. obviously when you do a large number it's more complex and there can be more variability but this was a well controlled and well conducted study and we intend to look into it very thoroughly to figure out what if we can identify if anything went wrong. >> dr. hung, thanks again for joining us first on cnbc this morning. the ceo of medivation. for more check out the blog pharmas market.cnbc.com. follow me on twitter at m huckman. back to you guys. >> thank you very much, huck. still to come, the mayor of

montrose, colorado, one of the nation's ski capitals, keeping his city's employment rate below the national average. he has some advice for washington lawmakers. >> plus, would the country be better off if the government was run more like a business? we'll debate it, next on "squawk on the street." we want to know what you think. logon to squawk on the street.cnbc.com to vote on that very topic.

the post office is trying to change the way it does business because it can't keep going into debt it says so it has come up with a plan to cut service days to five days a week. could this be an example for the rest of government? would it be better if the government were run more like a business? democratic strategist julian epstein is here and also

republican strategist jack berkman. jack i'm not sure whether you think the post office is taking the tough decisions or presumably if it was a private business it would go further and say, look, you people in rural communities, you're too expensive to have a postal service. we're just not going to bother with you? >> well, look. it's hard for government to make these kind of decisions. the only solution really is to privatize because there is very little that government can do well. if we ask the question what does government do well the only thing you can really think of is national security and that's in large part because the pentagon has been privatized over the last 30 years. and, you know, the real question is why don't we move in the direction of privatization? we see so many successful examples. look where i live in virginia. roads, toll roads that have become private. probably work something like ten times better than they did before. part of the reason we don't is because you've got, you know, you have julian's party, the democratic party wanting it build out these large welfare constituencies, these large

volumes of government workers, who depend on them. so there is a real -- what we need to do is privatize -- we're just not doing it. >> julian? >> well, i think as a matter of just fact, there's been just an enormous amount of study on the privatization of government functions to the private sector and whether it is contractors in afghanistan and iraq or whether it is a whole host of services that have been contracted out to the private sector here, what you often find is there's more waste in the private sector actually than in the government. there's less oversight and less accountability. if we really are looking to cut the deficit which is the big issue on people's minds today, privatization is not the answer. there's two things that'll do it. one is we've got to cut entitlement spending and the second is economic growth. those are the two things that more than anything else will cut the deficit. talking about privatization is really kind of a footnote. as for the post office, the post office has been rated by independent rating agencies as one of the most respected

government agencies that there is. it is totally self-sufficient. it is not paid for by taxpayer funds. it's got a -- it's actually had an enormously successful record of -- it delivers half the world's mail and it achieves important social policies as you point out by getting into areas that businesses don't want to go. >> you have towns picking up on what julian said when you look at something like dod sure you have waste in the $200 hammer but the only reason u.s. armed services have progressed in the last 30 years is because of privatization, because of companies like lockheed martin and general dynamics. without those companies our armed forces would be in the dark ages. at this point when you look at something like the pentagon the only thing it really provides are boots on the ground. almost everything is outsourced and that's a large part of why u.s. armed forces are the best in the world. take a look at something like amtrak. i mean, amtrak started out as a kind of quasi-public/private company, the kind of thing that julian is talking about and that he likes. richard nixon said, this thing

has to be profitable within a couple of years or we're going to get rid of it. amtrak has been run for 38 years. it has never made a profit. that's what's wrong with government. that's the kind of thing that either has to be made private or eliminated. >> you know, i always like to discuss issues and then someone comes along and makes it political. and i'm sorry i can't sit here and let you do that without responding, jack. you know, you talk about the democrats wanting to build out the government. would you like to discuss how george w. bush presided over an enormous increase in the size of government? so, please, don't lay this at the democrats. let's just talk about the issues and try to keep the politics out of it. now, as far as amtrak is concerned, that's a good one. let's talk about it. should, you know, this comes to the government like a business or government providing certain things regardless of whether it can make a profit. i mean, you know, you go over to europe. they have a great rail network. they don't make a profit.

it's considered almost like a utility and the government supports. would you -- i guess your position is we shouldn't do that here? but it's a valid way to do things. isn't it? >> it's a good way. first of all with respect to bush, mark, i opposed a lot of what bush did with spending. i agree entirely about the politics. secondly the united states is very different, much larger. you have 3500 miles coast to coast. it doesn't make economic sense public or private to do amtrak running from miami to los angeles. we do it for foolish political reasons because you have amtrak washington to new york that runs well, is profitable, should exist, but then you have other people in congress that say, well, we need it going all the way out to california. >> yeah. >> so we get into this kind of foolishness back and forth. >> yeah, i -- good point. i would have a hard time arguing on that one. well -- are we out of time? >> yes. that is the message. >> rats. just when we're getting going here, building a consensus, being bipartisan. >> no time. >> thank you very much.

>> thanks, guys. >> all right. you think the american government should be run like a business? it's -- and i know it's a question with a lot of nuances because, you know, there are some things that government must do that can't be run like a business. but in general, should it be run like a business? aye or nay? >> still ahead one-third of the stimulus package is now in the system but is it money well spent? a new report tracks the impact and we'll have it next. >> but first, oh, trish. >> anybody hear this? okay. coming up at the top of the hour president obama making one final push for health care reform. we'll discuss whether he can get his party onboard. also greece is unveiling its long awaited austerity plan. we'll have a live report plus debate whether in fact the country is going far enough and would you believe you can begin trading movie options? yep. we'll explain. lots ahead only on "the call" at the top of the hour. first "squawk on the street" is back right after this break. anncr vo: with the new geico glovebox app...

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the street." i'm brian shactman with some news out of the government accountability office. the gao out with the fifth bimonthly report on the recovery act as mandated by the recovery act. let's look at a few of the numbers here because we're tight on time. as of mid-february, $89 billion in spending has been paid out by the federal government to states and localities. that's a third of the overall spending that's supposed to go out. more than a third of what's gone out has been for infrastructure and transportation projects, about 11,000 of them, but despite all that money, cities and states are still cautious. >> states are acutely aware that there is a cliff effect here, potential cliff effect that once the money begins to wind down and so they aren't looking to build long-term commitments on that. the states are extremely worried about what happens once recovery money goes away. >> it's interesting that this is really looked at as a short-term mask of some major long-term

problems. >> the glass half empty part of this, though, is that while this money has been very important helping states trying to address some of their budget shortfalls in the short term, we did a report that came out yesterday that showed the long-term fiscal situation for both the federal government and for states and localities still very, very bleak. >> we talked so much about the job counting process, the gao remains critical of the authenticity of the numbers that have come out from the recovery board, but they do say they've seen improvement in reporting. the takeaway from these reports is we may never know how many jobs were created or saved by this $800 billion plus spending package. back to you. >> thank you, sir. we want to think what main street thinks of the hot-button issues in washington and on wall street from the jobs bill to health care. we're continuing our journey along route 50, u.s. 50. today we are further west. no, actually if you're traveling

a long distance that would be farther, farther west. >> wow! good guess. >> further means and furthermore and so on and so forth. farther means distance. montrose, california. i sat there and went anal and tried to do a grammar lesson. he is the mayor of montrose, colorado, and the next stop on the road to recovery. thank you very much for being with us. >> thank you for having me. >> glad to have you. we always like to hear from anything outside of new york and washington. how are things going in your town and what do you think of what's going on in washington? >> i'm sorry. i didn't hear the last part of the question. >> i say how are things going economically in montrose and what do you think about washington's efforts to get things going again? >> okay. i think that montrose is doing okay. we have felt the crunch like

everybody else in the u.s. however, i think that we've done quite a few things internally to set ourselves up to come out looking pretty good and probably a faster recovery than the rest of the u.s. would experience. >> what could you share with us what you did that made that possible? >> yes. we hired some consultants. we did a lot of assessment work as to what was working for us in our community and as a result of the recommendation of our consultants we implemented some changes in restructuring our organizations within the city of montrose. >> in what way? you're a transportation hub, and we can see clearly that tourism is one of the major industries as well. talk us through what you actually did and lessons that you might have learned, perhaps that others can benefit from.

>> what we did is we combined all our -- for example, our visitor and conventions bureau as well as our retail sales as well with the chamber of commerce. they are now all one organization, and we have -- we have done a lot of things, for example, we're looking at how to improve our airport which is a beautiful airport and we had record employments this year which is not the experience of the rest of the country. >> all right, sir. we're out of time, but boy, that's some spectacular video of skiing, isn't it? mayor abeyta, thank you very much, sir and continued prosperity to montrose, colorado. >> vote in our street poll. squawk -- it's not an e-mail poll. it's a web poll, squawk on the

street.cnbc.com. should the government be run more like a business? the results in two business, and i regret i'm going to have to say simon was right. stay tuned for that.

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today's street poll we asked you should the american government be run more like a business? you said yes. you didn't just say yes, you said yes. >> in the high-pitched way. >> like exasperated yes! i'm surprised 30% said no. those 30% are probably thinking about social services which you cannot run on a profitable basis, so i understand the no vote, but primarily yes. now i am persuaded that you are correct when we were discussing how to pronounce chile. >> oh, really? >> yes. and the logic that persuaded me was this. first of all it is chile. >> not chile. >> no, it's chile, but that shouldn't matter us to. >> no, because you're american. >> because we're american. it's not arrogance. if there were an earthquake in italy we would not be saying earthquake in italia and we

would not be saying an earthquake in deutschland, we'd say germany. you were right. it should be -- >> i feel as though there's another -- >> no, that's it. it's a burden being rate so often. thank you for watching the program. you are doing "street signs" this afternoon. >> i will be back at 2:00. >> four hours. >> a chock-full day. >> that's it for me. "the call" is is next. >> welcome to "the call," everyone. i'm trish regan. we are 90 minutes into the trading day. stocks are lower helped by a benign. >> is this heaven everybody? i'm larry kudlow. president obama making one final push for health care reform today. we'll discuss whether he can win his own democratic party much less some republicans, melissa. >> looking for something different to trade? how about movie options? can you imagine if you guessed right on "avatar?" . we'll explain how it